Introducing Greenpeace to the concept of sums
There are many ideas out there about how to make the world a better place. Some of them might work, most won’t - just one of those little tragedies. We need - and have - methods of trying to work out which is which. One method is our own favourite, simply use the market. The interactions of 8 billion people will pretty quickly come to a conclusion. But if our guess at making better is an intervention into markets then we do need to at least try to do some sums.
Renationalising the railways does not go far enough – Labour should spur a rail renaissance by allowing people around the UK unlimited train travel for a flat fee, campaigners have said.
Under a “climate card” system, passengers could pay a simple subscription to gain access to train travel across all services. This could be effective if set at £49 a month, according to research published on Thursday, though travellers on fast long-distance trains and those on routes in and through London would need to pay a top-up to reflect the greater demand on those services.
If such a system were implemented across the UK, it would be likely to result in a loss of revenues to the railways of between £45m and £637m, depending on the uptake, the report found. This would have to be subsidised by the government, but transport is already subsidised in various less effective forms, and the report found the climate card would generate economic growth and improvements to health from lower air pollution.
Well, OK, it’s an idea. The report is here. No, we’ve not checked, but we’d suspect that the numbers are done on one person in a car and everyone in a full train - rather than a full car and a half empty train. That’s just our prejudice there because that’s how these numbers are normally done.
But OK, let’s assume they’ve not done that. So, the benefit is:
This mode switching would result in a reduction of 378.7 thousand tonnes of carbon emissions (CO2e).
OK. We know what the value of a tonne less of CO2-e is - $80 because the Stern Review told us so (we think it’s true that this is actually higher than the number the govt currently uses as a shadow price - think, note). The value of the emissions reductions is £30 million therefore. The cost is £45 to 637 million. Or, if we run this back the other way, the cost of the CO2 reduction is $120 to $1,700 a tonne.
The value of the reduction is $80, the cost is up to $1,700. No, this is an idiot thing to do. Therefore don’t do it - doing things where the cost is greater than the value is known as making us all poorer.
Don’t forget the other thing the Stern Review told us. We must be efficient in our reaction to climate change. We must find the lowest cost methods of reducing emissions. Because - we’re all just odd this way - humans do more of cheaper things, less of more expensive. Using expensive methods to beat climate change will lead to less beating climate change - using less expensive methods more. Exactly and precisely because climate change is so important means we’ve got to concentrate, real hard now, on beating it efficiently.
So, no, idiot idea. But then Greenpeace and sums, eh?
Tim Worstall